Acorns Review: Is it Worth $1 a Month?

Acorns is making saving and investing money easy for the regular person.

Go back in time for a moment, when cash was the primary way to pay.

You’d live life, buy things, and always end up with change in your pockets, dashboard, and dresser.

However, as we move towards plastic cards to make our purchases, we are ending up with less and less change.

Acorns wants to change that, and they have been since 2014 by rounding-up purchases, making “virtual spare change,” which is then put away in your Acorns account and invested to grow.

It’s became extremely popular for its ease-of-use, beginner friendly, and intuitive nature. People are savings thousands of dollars a year with the app without much effort, it’s a truly powerful app.

This post a definitive Acorns app review that is going to cover what this virtual spare change investing Acorns does is all about, some of the pros and cons, who’s it good for, what else Acorns offers, and other considerations about the service. Let’s start with what exactly Acorns is…

What is Acorns?

Acorns is a micro investing app that allows you to invest spare change (what they call “round-ups”) into a diversified portfolio that is based on your financial goals and risk tolerance. It’s basically a digital piggy bank for spare change, which can really add up overtime, just like real change did when cash was the primary way of making purchases.

For example, let’s say you buy some coffee that costs you $2.40. Acorns will round-up, which would be 60-cents, and when these round-ups reach $5, they withdraw it from your bank and put it into your Acorns account. It’s pretty simple, and makes investing frictionless, which is why it’s so popular.

However, while this app started out allowing you to round-up purchases to put away into an investment account which will help it grow overtime, it now has expanded it’s horizons and also allows you to open an IRA, a fee-free savings account, and more. All of which we cover below.

How Does Acorns Work?

The main feature of Acorns, named Acorns Core, allows you to round-up purchases, set up recurring contributions, and even contribute one-time amounts. The app is rather intuitive, and signing up is super simple. Acorns has done an amazing job at making the sign up process a breeze.

Acorns will ask you questions about your finances, these are to help you pick the best investment strategy for you.

Start saving without thinking! Once you are all set up, you can start saving from round-ups, recurring contributions, or even a one-time contribution to get your account started off. Not to mention that your money will grow overtime from it being invested.

After you’ve signed up, you can start saving and investing automatically with Acorns Core. Here’s a little tip: If you think you’ll never save any significant amount of money, consider using the round-up multipliers. This allows you to take your round-up amount, and multiply it by 2, 3, or 10. This really helps speed up savings, and can bring you from saving a dollar or less every purchase to a couple dollars or more!

But wait, there is more that this nifty little app offers that you may want to keep in mind…

Acorns Later

Acorns Later is the name they’ve given their Individual Retirement Account (IRA) that you can contribute to. You can setup a Roth, Traditional, or SEP IRA with Acorns, and then have recurring contributions of your choice to grow your IRA account. This feature was added in 2018, and it fits perfectly with the platform.

Think of Acorns Core as a way to save for liquid, short-term funds – for a vacation, emergency fund, for a car, etc. On the flip side, Acorns Later is great for long-term savings, for retirement, which will grow over the years.

Acorns Spend

Acorns Spend is a full-service online checking account that goes above and beyond, and makes the app overall that much better. Acorns Spend offers some amazing features:

No overdraft fees

Fee-refunds for ATM withdrawals

No minimum balance fees

Direct deposits

Mobile check deposits and payments

The ability to have real-time round-ups and extra Found Money from local retailers. Speaking of Found Money…

Acorns Found Money

Found Money allows you to get cash into your Acorns account by shopping with companies that have partnered up with Acorns. These can vary from 1% to 10%, depending on the company. Some of the companies that have partnered up with Acorns to invest money in your Acorns Core account (with no strings attached) include places like:

Walmart

Groupon

Macy’s

Expedia

DIRECTV

Lyft

Sam’s Club

Barnes & Noble, Liberty Mutual, Sephora, and many more

Consider this:

Even if you don’t find that Acorns is all that great, the Found Money feature alone can make getting Acorns worthwhile.

Think about it, how often do you shop at places like Walmart, Macy’s, and Groupon, or any of the other partners?

If you assume that each partner invests just 1% of your purchase price with them, you’d only need to spend $100 a month to “cancel out” the $1 Acorns account fee.

Plus, that’s assuming you’ll only get 1% back! Many places give much more, up to 10%.

You could literally do nothing different, continue shopping at the places you already shop, not contribute any of your own money to Acorns, and still come out ahead with what is basically free money. This simple math is powerful, and it can help you get some free money into your Acorns Core account without spending or investing anything yourself.

Acorns Fees

Spoiler alert: college students can use Acorns for free for 4 years! All you need is a .edu email and you’re in. If you’re a college student and want to enjoy Acorns without any fees for 4-years, no matter which level you are in, sign up here for free.

If you are not a college student, the fee’s still aren’t that bad. Here is the different fee structures based on what services you use:

Acorns Monthly Fee: $1 / month

Acorns Core, the main feature of Acorns, costs just $1 per month. That’s $12 a year. The cost of a meal (or two) is what it will cost you to have this app. But, although it sounds cheap (and is), there is a large debate online whether or not it really makes sense.

The Acorns Fee Debate

There is a lot of talk over the $1 per month fee Acorns charges for their core service and if it’s really worth it. If you break it down and take into consideration who the app is made for, it isn’t so bad.

For example, let’s say you contribute a total of $100 per month to Acorns from a combination of scheduled contributions and round-ups. The $1 fee as a percentage is 1%, which is still high when compared to some other robo-advisors out there.

But what these numbers fail to recognize is the utility of the app. Acorns makes saving for those who have troubles saving easy. Acorns also makes investing easy for those with no investing experience. In fact, Acorns is a great tool to get some experience with investing.

Once you consider that, the $1 fee isn’t so bad. You’re sort of paying for an assistant to help you save and invest your money that you wouldn’t be otherwise. Personally, $12 a year to save $1,200 a year (assuming you save $100 per month) is a great deal, even if it is a 1% fee.

One other thing to remember is: as you build your Acorns account value, you dilute the percentage. Until you hit one-million dollars with Acorns, the fee stays the same of just $1 per month. And while that is a far stretch, every dollar you add to Acorns basically gives you more value.

Acorns Later Fee: $2 / month

Acorns Later is set at $2 per month. It’s important to keep in mind that this also includes the regular, Acorns Core, features as well. As of now, it’s not possible to only use Acorns Later by itself, which makes sense as Acorns Core is there main product.

Acorns Spend Fee: $3 / month

Acorns Spend is set at $3 per month, and also include Acorns Later and Acorns Core. Even at $3 a month, for a checking account that offers many benefits like refunding ATM charges, no overdraft fees, and no minimum balance requirements; it’s a solid deal. Just one ATM use per month which will now be fee-free (or refunded) and Acorns practically pays for itself – not to mention you also get access to all of Acorns features and tools with Acorns Spend! To be honest, using Acorns just for their checking account wouldn’t be a bad idea.

One more thing: there are no minimum balance or withdrawal fees with Acorns. Yup, they don’t charge you for getting your money – how kind of them! 😉

Acorns Frequently Asked Questions

There is a lot going on with Acorns and all of the things they offer. You may have questions about if Acorns is worth it, or where your money is invested, and those answers (and more) can be found below.

What Does Acorns Invest in?

You are probably curious where exactly your money is going. It’s no secret, in fact, they tell you exactly where your money is going.

Acorns has a unique system which allows you to choose between 5 different portfolios, which will be recommended to you based on the questions you are asked when you sign up – although you can entirely ignore their recommendations and go with your own choice.

Acorns invests based on the modern portfolio theory (MPT), which means they value diversification into different assets classes more than individual security selection. Those asset classes include: government bonds, corporate bonds, large companies, small companies, emerging markets, developed markets, and real estate. These 7 asset classes are included by investing in these 7 Exchange Traded Funds (ETFs):

iShares iBoxx $ Investment Grade Corp Bond Fund (LQD)

iShares 1-3 Year Treasury Bond ETF (SHY)

Vanguard Small-Cap Index Fund ETF Shares (VB)

Vanguard REIT Index Fund ETF Shares (VNQ)

Vanguard 500 Index Fund ETF Shares (VOO)

Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO)

Vanguard FTSE Developed Markets Index Fund ETF Shares | VEA

Depending on your age, income, timeline, and other factors, Acorns (or just your own personal choice) will provide you a unique combination of investments in the above ETFs to match your individual situation. They name each portfolio class like so:

Conservative

Moderately Conservative

Moderate

Moderately Aggressive

Aggressive

If you are new to investing, this might not make a lot of sense. That is OK! That’s exactly why they have given each portfolio a clear name, so it all makes sense. For example, a conservative portfolio is going to be much more on the safe side – with a higher percentage of your money going into bonds. And vice verse, aggressive portfolios will be more invested into small companies and less into bonds. As you gain experience, the nuances will make more sense. Acorns has done a great job making it easy for anyone with zero investment knowledge to get in the game.

Is Acorns Safe?

When it comes to a financial service, safety and security is important. For starters, Acorns is a legitimate company that is regulated, and has been available since 2014 with millions of dollars in funding. Your investments are also SIPC insured up to $500,000, so in the event Acorns “went under,” your money is still safe. If you plan on using Acorns Spend, Acorns is FDIC insured up to $250,000 as well. In addition to your investments and money being insured, they also run your data through 256-bit encryption to keep all your data safe. All-in-all, Acorns seems to be up to the industry standards when it comes to the safety of your financial data, and there is no indicator that Acorns is unsafe.

Is Acorns Legit?

Acorns is insured, regulated, and offers a legitimate service. It’s hard to get insurance and be regulated and still run a scam, so it’s safe to say that Acorns is legit, and not a scam. In fact, you are free to withdraw your money at any time from the app without any fees, which scams probably wouldn’t let you. Acorns is also endorsed and backed by some pretty big names like PayPal, BlackRock, Dr. Harry Markowitz, Kevin Durant, and even Ashton Kutcher. Oh, and they’ve been used by over 3,000,000 people and manage over $1 billion!

Is Acorns Worth it For You?

It depends. If you are older and need to make significant gains for retirement – it’s probably not the best channel in itself to achieve that. If you’re a seasoned pro and disciplined when it comes to saving money and investing, it’s also probably not worth it.

I find Acorns being worth it the most for those who are having troubles saving money and have no investing experience. Acorns makes it seamless to save and invest, which is a great place to start when you are at zero.

Acorns Alternatives: Are There Any Apps Like Acorns?

There is nothing really quite like Acorns that offers the variety of services that they do, but there are similar apps out there that do offer similar ways of saving / investing. Those services include:

Qapital

Stash

Digit

It may be worth it to look into these services, too. However, Acorns seems to be the most popular for beginner investors and / or people looking to save that have troubles saving currently.

Acorns Review Summary

Acorns has came a long way since inception. They started out with Acorns Core, their initial spare change investing idea that allows you to start investing with Acorns, and now have expanded into offering IRAs and checking accounts that offer great features. In summary, here are some of the pros and cons to keep in mind about Acorns.

Acorns Pros

Makes saving easy and automated. Perfect for those who have troubles saving money and need to get started somewhere.

Pre-built investment portfolios that are based on your specific goals and circumstances. This makes it extremely easy for beginners to get started with investing.

Automatic portfolio rebalancing. Making it truly a hands-off investment experience.

Full suite of tools for your finances from their round-up feature, IRA account, to checking account.

Free educational content in-app to help you learn more about your money.

Acorns Cons

Limited investment options, bound to 5 different portfolios. This is not ideal for the more experienced investors.

Dustyn is a personal finance aficionado and the founder of Dime Will Tell where he writes about his experiences he's had saving $20,000 with zero debt all by the age of 21. He's been featured as an expert resource in publications like Huffington Post, Go Banking Rates, & Reader's Digest.